Pfizer (PFE 0.29%) and Moderna (MRNA 0.91%) have been in agreement on a lot since the beginning of the pandemic. They both recognized the importance of eventually launching combined vaccines -- such as those covering flu and coronavirus -- and consider them the ticket to stronger vaccine uptake. The vaccine leaders also have predicted the coronavirus vaccine market is likely to follow that of the flu market, with many Americans going for an annual jab.
But, in recent days, each company has made a statement showing they don't see eye to eye on one particular point. It has to do with something that offers us clues about long-term vaccine demand -- and revenue potential. Let's take a closer look at what both companies had to say and what that could mean for investors.
Forecasts for annual vaccine sales
Earlier in the year, Pfizer and Moderna both made forecasts for annual vaccine sales. The companies recognized the declines in demand as we head toward a post-pandemic situation, but they still were able to offer an estimate of what the market might look like this year. Both companies collect some revenue from government contracts, but they also now are selling doses directly to healthcare providers in what's known as a commercial market.
Pfizer and Moderna originally launched coronavirus vaccines back in late 2020 and since have generated billions of dollars in earnings. In recent times, though, the big question has been whether these players will continue to bring in significant revenue from their vaccines into the future. Both companies, which recently launched updated vaccines, say this year's vaccination season could offer clues.
Now, let's get to the point that separates Pfizer and Moderna. Pfizer just recently cut its forecasts for sales of its coronavirus vaccine, Comirnaty, this year by $2 billion based on trends it's seeing in the market. It originally had predicted $13.5 billion in vaccine sales for the year. In a call with investors, the company said today it assumes about 17% of Americans will go for a COVID shot this fall.
NYSE: PFE
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After Pfizer's move, Moderna issued a statement saying it sticks by its vaccine sales guidance range of $6 billion to $8 billion this year. This is in the context of 50 million to 100 million doses administered, which represents about 15% to 30% of the U.S. population. Moderna also said it's too early in the vaccination season to make a more precise estimate.
At this point, we could say Moderna from the start may have been a bit more cautious by issuing a wide forecast for vaccine sales this year.
Pfizer's plan to realign costs
Meanwhile, Pfizer's observations so far pushed the company to launch a plan to realign costs with its future revenue opportunity. The big pharma aims to save at least $3.5 billion.
As for costs, Moderna might be in a stronger position because its entire pipeline may benefit from the investments it's made in research and development and infrastructure for the coronavirus program. That's because the mRNA technology used in the vaccine is used across Moderna's pipeline. For example, Moderna aims to build a billion-dollar respiratory vaccine franchise so the investments it's made so far for its coronavirus vaccine are and will be useful for these additional products.
NASDAQ: MRNA
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Pfizer also is working on other mRNA candidates -- but this technology isn't the backbone of its entire pipeline. And that means the investments in the coronavirus vaccine platform won't necessarily serve all of its programs -- and Pfizer is right to realign costs.
What does this mean for investors?
Pfizer sees now as the moment to make initial observations about this fall's vaccine demand -- and take action. Moderna says it's too early to draw any conclusions. Considering each company's business, as I talked about above, they both are right.
So, as an investor, there's reason to be confident about Pfizer and Moderna and the way they're handling the current situation. And both of these companies offer solid long-term prospects beyond the vaccine. They aim to launch several new products over the next few years that should translate into billions of dollars in revenue.
Of course, shares of Pfizer and Moderna probably won't recover overnight as investors focus on vaccine trends and sales. But, the investors who decide to get in on these stocks today, while they're down, may reap rewards over time -- once the focus shifts from the vaccine to the companies' entire pipeline.
